Strong Headwinds but Sparks of Light in the F&B Sector

We need to prep for upturn, while bracing for a longer recovery time.

Ms Charlene Ang, Director
Asian Culinary Institute Singapore (ACI), a CET Institute of Nanyang Polytechnic


Even before COVID-19 hit our shores, the F&B sector was already affected by headwinds caused by the US-China trade tensions. The increased spends during the year-end festive season helped tide us over, but the new year has not been kind.

Decline in Customer Numbers

With the COVID-19 pandemic, our industry has been confronted with its worst hit yet. With locals avoiding public places and gathering in large groups, the entire sector has been hard hit by cancellations, a fall in walk-ins, and plummeting tourist numbers exacerbating the low figures. Restaurateurs have told me that they’ve seen businesses dip by up to 90% on some days.

Meanwhile, here are some key steps that restaurants can take now:

1. Get on the digital technology bandwagon – food deliveries are continuing because people are choosing to eat in. Supplement revenues via increased food delivery and take-away orders.

2. With both Unity and Resilience Budgets, the government is rolling out assistance schemes, such as the SkillsFuture Enterprise Credit, Enhanced Training Support Package and SkillsFuture Credit. Take the opportunity to tap on them to transform. Understandably, it is easier said than done, with cash flows being threatened. But it will be crucial to see what you need to do to transform your operations and manpower requirements. For example, if you need to adopt technology, can your point-of-sales cope? Are your workers comfortable with the transition?

3. There are also SkillsFuture courses that your employees can enrol in to upskill: analysing data to review your backroom operations and stock levels could be one avenue to explore. Perhaps it is also time to get your floor managers up-to-date with digital marketing skills so that they can run small-budget tactical ads to targeted customers, to ramp up business.

Stepped up Measures

With the rapid increase in cases in Europe and the US, we have to brace ourselves for a longer run and slower recovery, than initially anticipated. Singapore has also introduced a new slew of measures to increase social distancing in order to control the spread of the virus, and extended the Circuit Breaker to June.

I’ve heard encouraging news that some companies are already identifying skills and technology gaps, and looking into enhancing their businesses. They are taking the opportunity to plan and prepare for the next S curve when recovery takes place. They are sending their staff for training as well as implementing new technology and digitalisation projects, which they did not have time to do so during peak periods. This will get them ready to seize opportunities when there is an upswing. These companies are looking into cost-cutting measures to preserve jobs, and they are tapping on government assistance programmes to tide over this period.

If you need help to start on the journey, come and consult us at NYP-ACI on the grants and help available, such as absentee payrolls and the Job Redesign Place and Train Scheme for Food Services by WSG. In addition, we administer the Food Services Development Grant by SSG. We can work on innovation and productivity enhancements through R&D, as well as training programmes tailored to your workforce.

These are extraordinary times. We’ve never seen a global threat of this nature.  And, it will require our industry to make some urgent changes to survive and thrive in the future.

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First published 24 March 2020

Updated 11 May 2020